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Name | Symbol | Market | Type |
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Capital Bank Financial Corp. - Southern Community Capital Trust II - % Cumulative Trust Preferred Securities (MM) | NASDAQ:SCMFO | NASDAQ | Preference Share |
Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
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0.00 | 0.00% | 10.18 | 0 | 01:00:00 |
From Jun 2019 to Jun 2024
Financial Highlights:
-- Net income before preferred dividends of $261 thousand and net loss after preferred dividends of $371 thousand for second quarter 2010 represents an improvement of $4.9 million sequentially and $2.9 million year-over-year; -- Net interest margin of 3.46% for second quarter 2010 increased 5 basis points on a linked quarter basis and 41 basis points year-over-year; -- Year-over-year increases of 20% in demand deposits and 36% in interest bearing non-time deposits bolstered net interest margin; -- Provision for loan losses of $5.5 million decreased $4.5 million compared to first quarter; -- Linked quarter improvements in non-interest income of 11% in total and 21% excluding securities gains and other than temporary impairment writedowns; -- Net charge-offs of $11.9 million, or 3.95% of average loans (annualized), up from $3.6 million, or 1.20% of average loans (annualized), in the first quarter; -- Allowance for loan losses decreased to $29.6 million, or 2.47% of total loans, at June 30, 2010, compared to $36.0 million, or 2.98% of total loans, at March 31, 2010; and -- Nonperforming assets increased to $74.3 million or 4.47% of total assets at June 30, 2010 from $70.9 million or 4.15% of total assets at March 31, 2010.
Southern Community Financial reported a reduction in the net loss available to common shareholders to $371 thousand in the second quarter of 2010, compared with a net loss of $5.2 million in the first quarter of 2010 and net loss of $3.3 million in the second quarter of 2009. The net loss per diluted common share in the second quarter of 2010 also decreased to $0.02, compared to $0.31 in the first quarter of 2010 and $0.20 in the second quarter of 2009.
"While it is premature to say that this adverse credit cycle is behind us, we believe that we have identified our largest problem credits, and our allowance for loan losses at June 30, 2010 appropriately reflects the risk inherent in our loan portfolio," said F. Scott Bauer, Chairman and Chief Executive Officer. "During the second quarter of 2010, we charged off a $4.2 million land development loan, which had specific reserves previously allocated. As we had anticipated, this loan accounted for a significant portion of our net charge-offs in the second quarter and the majority of the decrease in the allowance for loan losses during the second quarter. Additionally, we have made substantial progress in resolving other problem credits, and expect write-downs on foreclosed assets to moderate from current levels over the next few quarters. The additions that we are now seeing to nonperforming assets are less pronounced than we experienced in the previous two quarters. Consequently, our allowance for loan losses reflects our expectation that the level of nonperforming loans will begin to moderate in the third quarter of 2010.
Our core bank operations continue to weather the current economic climate well. Our net interest income improved modestly compared to the first quarter and 7% on a year-over-year basis, due to our continued focus on improving our deposit mix towards lower cost deposits. Also during the second quarter on a linked quarter basis, our non-interest income in total increased 11% and non-interest income excluding securities gains and OTTI writedowns increased 21%. This increase is a direct result of our focus on our customers' investment needs as well as the addition of new checking accounts and the resulting debit card income. Our pre-tax, pre-provision earnings improved 3% compared to the first quarter of 2010 and 274% compared to the second quarter of 2009 as a result of our strong core business and the absence of some nonrecurring prior period transactions.
Over the next few quarters, we anticipate continued slow loan demand due to the persistent economic drag across our footprint. Additionally, we believe that our funding costs will remain relatively stable. We remain well capitalized with ratios exceeding regulatory requirements and we expect to remain well capitalized. I wish to thank our customers and shareholders for their strong support and our employees who continue to do an exceptional job."
Asset Quality
Nonperforming loans increased to $55.5 million, or 4.63% of total loans, at June 30, 2010 from $50.6 million, or 4.19% of total loans, at March 31, 2010. Nonperforming assets increased to $74.3 million, or 4.47% of total assets, at June 30, 2010 from $70.9 million, or 4.15% of total assets, at March 31, 2010 due primarily to a $4.9 million increase in nonperforming loans offset by a $1.5 million decrease in foreclosed assets during the quarter. Net charge-offs totaled $11.9 million, or 3.95% of average loans on an annualized basis, an increase from $3.6 million, or 1.20% of average loans annualized, from the first quarter 2010.
The provision for loan losses of $5.5 million in the second quarter of 2010 decreased $4.5 million compared with the first quarter 2010. The allowance for loan losses decreased $6.4 million during the second quarter to $29.6 million, or 2.47% of loans, at June 30, 2010 primarily due to a $4.2 million charge-off of specific reserves that were allocated in prior quarters.
Net Interest Income
Net interest income of $13.4 million in the second quarter of 2010 increased 1% compared to $13.2 million in the first quarter of 2010, and increased 7% compared to $12.6 million in the second quarter of 2009. The net interest margin increased 5 basis points to 3.46% in the second quarter of 2010 compared with 3.41% in the first quarter of 2010, primarily due to lower deposit costs resulting from active liability management with an emphasis on improving the funding mix and lowering funding costs. The modest sequential increase in net interest income in the second quarter of 2010 was due to the impact of the increase in net interest margin partially offset by the $13.6 million decrease in average loan balances. Compared to the second quarter of 2009, the net interest margin increased 41 basis points. The year-over-year growth in net interest income in the second quarter of 2010 resulted primarily from the impact of the Company's deposit and borrowing costs repricing lower than its asset yields which were positively impacted by the increased utilization of interest rate floors on a majority of variable rate loans. Offsetting a portion of this favorable margin variance in comparing year-over-year net interest income was the decrease in average loan balances of $72.3 million, or 6%, attributable to a slowdown in loan demand due to the current economic environment.
Non-interest Income
Non-interest income increased by $439 thousand, or 11%, to $4.4 million during the second quarter of 2010 compared with the first quarter of 2010. The increase in non-interest income primarily resulted from a $274 thousand increase in income from investment brokerage, $162 thousand increase in service charge income, $147 thousand increase in Small Business Investment Company (SBIC) income and a $186 thousand decrease in "other-than-temporary impairment" writedowns. These favorable impacts were reduced by a $336 thousand decrease in gains on sales of investment securities. On a year-over-year comparison, non-interest income in the second quarter of 2010 increased $1.8 million, or 68%, compared with the second quarter of 2009. The year-over-year increase was primarily the result of $874 thousand net increase in derivatives gains, attributable primarily to $1.0 million write-off of collateral held by Lehman as swap counterparty in second quarter 2009, as well as increases in gains on sales of investment securities, SBIC income, income from investment brokerage and service charge income.
Non-interest Expenses
Non-interest expenses of $12.3 million during the second quarter of 2010 increased $490 thousand, or 4%, on a linked quarter basis. The sequential increase in non-interest expenses was primarily due to the $335 thousand increase in expenses related to foreclosed assets, both write-downs on the carrying values and the costs of acquiring and maintaining foreclosed real estate, and the $198 thousand increase in legal expenses incurred primarily to assist in the resolution of problem credits. Partially offsetting this, the Company reduced discretionary spending on a linked quarter basis by $148 thousand in salaries and employee benefits and $34 thousand in contributions. The Company had a 3% sequential decrease in personnel expenses resulting from staff reductions and cost savings programs initiated in prior quarters, including a company-wide salary freeze and a reduction in 401(k) employer matching contributions.
Balance Sheet
As of June 30, 2010, total assets amounted to $1.7 billion, representing a decrease of $66.6 million, or 4%, year-over-year. On a linked quarter basis, total assets decreased $47.1 million, or 3%. The loan portfolio decreased by $9.9 million, or 1%, sequentially during the second quarter of 2010 and decreased by $52.6 million, or 4%, since June 30, 2009 due to decreased loan demand. Total deposits of $1.3 billion at June 30, 2010 increased $49.1 million, or 4%, year-over-year. Deposits decreased $14.1 million, or 1%, during the second quarter 2010 as the Company continued to shift its deposit mix toward lower cost money market and transaction accounts from certificates of deposit. Non-interest bearing demand deposits increased $10.3 million, or 9%, and money market, savings, and NOW deposits increased $3.4 million, or 1%, while time deposits decreased $27.8 million, or 5%, compared to the first quarter of 2010.
At June 30, 2010, stockholders' equity of $117.0 million represented 7.05% of total assets. Stockholders' equity increased $102 thousand, or less than 1%, from $116.9 million at March 31, 2010 primarily the result of an increase in other comprehensive income due to an increase in the fair values of investment securities available for sale partially offset by the second quarter loss discussed above. Regulatory capital ratios remain in excess of the "well capitalized" threshold.
Conference Call
Southern Community's executive management team will host a conference call on July 23, 2010, at 9:30 am Eastern Time to discuss the quarter-end results. The call can be accessed by dialing 1-877-874-1589 or 1-719-325-4827 and entering pass code 1824927. A replay of the conference call can be accessed until 11:59 pm on August 6, 2010, by calling 1-888-203-1112 or 1-719-457-0820 and entering pass code 1824927. You may access additional presentation materials for this conference call in the Investor Relations section of Southern Community's web site at www.smallenoughtocare.com.
Southern Community Financial Corporation is headquartered in Winston-Salem, North Carolina and is the holding company of Southern Community Bank and Trust, a community bank with twenty-two banking offices throughout North Carolina.
Southern Community Financial Corporation's common stock and trust preferred securities are listed on the NASDAQ Global Select Market under the trading symbols SCMF and SCMFO, respectively. Additional information about Southern Community is available on our website at www.smallenoughtocare.com or by email at investor.relations@smallenoughtocare.com.
This news release contains forward-looking statements. Such statements are subject to certain factors that may cause the Company's results to vary from those expected. These factors include changing economic and financial market conditions, competition, ability to execute our business plan, items already mentioned in this press release, and other factors described in our filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's judgment only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events and circumstances that arise after the date hereof.
Southern Community Financial Corporation (Dollars in thousands except per share data) (Unaudited) For the three Six months ended months Ended Income Jun 30, Mar 31, Dec 31, Sep 30, Jun 30, Jun 30, Jun 30, Statement 2010 2010 2009 2009 2009 2010 2009 ------- ------- -------- ------- ------- ------- -------- Interest Income $20,439 $20,986 $ 22,092 $22,186 $22,451 $41,425 $ 45,195 Interest Expense 7,007 7,739 8,701 8,868 9,872 14,746 20,157 ------- ------- -------- ------- ------- ------- -------- Net Interest Income 13,432 13,247 13,391 13,318 12,579 26,679 25,038 Provision for Loan Losses 5,500 10,000 18,000 6,000 6,000 15,500 10,000 Net Interest Income after Provision for Loan Losses 7,932 3,247 (4,609) 7,318 6,579 11,179 15,038 Non-Interest Income Service Charges on Deposit Accounts 1,719 1,557 1,671 1,588 1,543 3,276 2,987 Income from mortgage banking activities 359 358 416 512 760 717 1,176 Investment brokerage and trust fees 509 235 292 359 212 744 508 SBIC income (loss) and management fees 323 176 (218) 171 (43) 499 195 Gain (Loss) on Sale of Investment Securities 1,018 1,354 - 735 500 2,372 501 Gain (Loss) and Net Cash Settlement on Economic Hedges (38) (31) 852 316 (912) (69) (934) Other-than- temporary impairment - (186) - - - (186) - Other Income 502 490 513 508 550 992 758 ------- ------- -------- ------- ------- ------- -------- Total Non- Interest Income 4,392 3,953 3,526 4,189 2,610 8,345 5,191 Non-Interest Expense Salaries and Employee Benefits 5,321 5,469 5,385 5,690 5,897 10,790 11,427 Occupancy and Equipment 1,895 1,916 1,882 1,997 1,990 3,811 4,024 Goodwill Impairment - - - - - - 49,501 Other 5,117 4,458 6,311 4,934 5,834 9,575 9,347 ------- ------- -------- ------- ------- ------- -------- Total Non- Interest Expense 12,333 11,843 13,578 12,621 13,721 24,176 74,299 Income (Loss) Before Taxes (9) (4,643) (14,661) (1,114) (4,532) (4,652) (54,070) Provision for Income Taxes (270) (32) (3,944) (683) (1,845) (302) (2,059) ------- ------- -------- ------- ------- ------- -------- Net Income (Loss) $ 261 $(4,611) $(10,717) $ (431) $(2,687) $(4,350) $(52,011) ======= ======= ======== ======= ======= ======= ======== Effective dividend on preferred stock 632 633 627 621 633 1,265 1,260 ------- ------- -------- ------- ------- ------- -------- Net Income (loss) available to common share- holders $ (371) $(5,244) $(11,344) $(1,052) $(3,320) $(5,615) $(53,271) ======= ======= ======== ======= ======= ======= ======== Net Income (Loss) per Common Share Basic $ (0.02) $ (0.31) $ (0.68) $ (0.06) $ (0.20) $ (0.33) $ (3.17) Diluted $ (0.02) $ (0.31) $ (0.68) $ (0.06) $ (0.20) $ (0.33) $ (3.17) ======= ======= ======== ======= ======= ======= ======== Balance Sheet Jun 30, Mar 31, Dec 31, Sep 30, Jun 30, 2010 2010 2009 2009 2009 ---------- ---------- ---------- ---------- ---------- Assets Cash and due from Banks $ 35,757 $ 33,885 $ 30,184 $ 22,953 $ 27,265 Federal Funds Sold & Int Bearing Balances 1,358 22,352 31,269 21,792 1,496 Investment Securities 307,595 335,519 323,700 323,800 333,722 Federal Home Loan Bank Stock 9,794 9,794 9,794 9,794 9,794 Loans held for sale 6,582 2,984 3,025 2,559 8,068 Loans 1,198,565 1,208,454 1,230,275 1,248,249 1,251,200 Allowance for Loan Losses (29,609) (36,007) (29,638) (20,807) (19,390) ---------- ---------- ---------- ---------- ---------- Net Loans 1,168,956 1,172,447 1,200,637 1,227,442 1,231,810 Bank Premises and Equipment 41,535 42,058 42,630 42,590 42,006 Foreclosed Assets 18,781 20,285 19,634 18,118 17,881 Other Assets 69,757 67,856 67,735 56,293 54,667 ---------- ---------- ---------- ---------- ---------- Total Assets $1,660,115 $1,707,180 $1,728,608 $1,725,341 $1,726,709 ========== ========== ========== ========== ========== Liabilities and Stockholders' Equity Deposits Non-Interest Bearing $ 123,573 $ 113,292 $ 118,372 $ 106,156 $ 103,205 Money market, savings and NOW 623,854 620,433 579,027 526,884 459,682 Time 545,420 573,229 616,671 646,039 680,875 ---------- ---------- ---------- ---------- ---------- Total Deposits 1,292,847 1,306,954 1,314,070 1,279,079 1,243,762 Borrowings 242,303 275,831 284,580 303,978 340,335 Accrued Expenses and Other Liabilities 7,981 7,513 7,961 8,222 8,913 ---------- ---------- ---------- ---------- ---------- Total Liabilities 1,543,131 1,590,298 1,606,611 1,591,279 1,593,010 Total Stockholders' Equity 116,984 116,882 121,997 134,062 133,699 ---------- ---------- ---------- ---------- ---------- Total Liabilities and Stockholders' Equity $1,660,115 $1,707,180 $1,728,608 $1,725,341 $1,726,709 ========== ========== ========== ========== ========== Tangible Book Value per Common Share $ 4.46 $ 4.45 $ 4.77 $ 5.49 $ 5.47 ========== ========== ========== ========== ========== For the three months ended Jun 30, Mar 31, Dec 31, Sep 30, Jun 30, 2010 2010 2009 2009 2009 ---------- ---------- ---------- ---------- ---------- Per Common Share Data: Basic Earnings per Share $ (0.02) $ (0.31) $ (0.68) $ (0.06) $ (0.20) Diluted Earnings per Share $ (0.02) $ (0.31) $ (0.68) $ (0.06) $ (0.20) Tangible Book Value per Share $ 4.46 $ 4.45 $ 4.77 $ 5.49 $ 5.47 Cash dividends paid $ - $ - $ - $ - $ - Selected Performance Ratios: Return on Average Assets (annualized) ROA 0.06% -1.10% -2.44% -0.10% -0.61% Return on Average Equity (annualized) ROE 0.90% -15.34% -31.92% -1.28% -7.87% Return on Tangible Equity (annualized) 0.90% -15.44% -32.14% -1.29% -7.93% Net Interest Margin 3.46% 3.41% 3.28% 3.30% 3.05% Net Interest Spread 3.32% 3.26% 3.08% 3.10% 2.84% Non-interest Income as a % of Revenue 24.64% 22.98% 20.84% 23.93% 17.18% Non-interest Income as a % of Average Assets 1.04% 0.94% 0.80% 0.96% 0.59% Non-interest Expense to Average Assets 2.93% 2.82% 3.09% 2.91% 3.12% Efficiency Ratio 69.19% 68.85% 80.26% 72.09% 90.34% Asset Quality: Nonperforming Loans $ 55,477 $ 50,608 $ 37,732 $ 22,697 $ 17,851 Nonperforming Assets $ 74,258 $ 70,893 $ 57,366 $ 40,766 $ 35,732 Nonperforming Loans to Total Loans 4.63% 4.19% 3.07% 1.82% 1.43% Nonperforming Assets to Total Assets 4.47% 4.15% 3.32% 2.36% 2.07% Allowance for Loan Losses to Period-end Loans 2.47% 2.98% 2.41% 1.67% 1.55% Allowance for Loan Losses to Nonperforming Loans (X) 0.53 X 0.71 X 0.79 X 0.92 X 1.09 X Net Charge- offs to Average Loans (annualized) 3.95% 1.20% 2.92% 1.45% 1.85% Capital Ratios: Equity to Total Assets 7.05% 6.85% 7.06% 7.77% 7.74% Tangible Common Equity to Total Tangible Assets(1) 4.52% 4.39% 4.63% 5.34% 5.32% Average Balances: Year to Date Interest Earning Assets $1,564,646 $1,573,247 $1,638,171 $1,643,945 $1,665,784 Total Assets 1,695,640 1,704,190 1,767,047 1,774,376 1,800,376 Total Loans 1,215,776 1,222,594 1,272,087 1,280,803 1,295,913 Equity 119,293 121,944 147,652 155,522 162,126 Interest Bearing Liabil- ities 1,451,099 1,459,636 1,501,705 1,506,867 1,525,524 Quarterly Interest Earning Assets $1,556,140 $1,573,247 $1,621,037 $1,600,979 $1,652,424 Total Assets 1,687,184 1,704,190 1,745,299 1,723,224 1,766,553 Total Loans 1,209,033 1,222,594 1,246,223 1,251,076 1,281,309 Equity 116,671 121,944 133,201 133,627 137,019 Interest Bearing Liabil- ities 1,442,655 1,459,636 1,486,386 1,470,162 1,515,206 Weighted Average Number of Shares Outstanding Basic 16,814,378 16,806,292 16,789,045 16,791,175 16,791,340 Diluted 16,814,378 16,806,292 16,789,045 16,791,175 16,791,340 Period end outstanding shares 16,812,625 16,818,125 16,787,675 16,791,175 16,793,175 Six months Ended Jun 30, Jun 30, 2010 2009 ---------- ---------- Per Common Share Data: Basic Earnings per Share $ (0.33) $ (3.17) Diluted Earnings per Share $ (0.33) $ (3.17) Tangible Book Value per Share $ 4.46 $ 5.47 Cash dividends paid $ - $ - Selected Performance Ratios: Return on Average Assets (annualized) ROA -0.52% -5.83% Return on Average Equity (annualized) ROE -7.35% -64.69% Return on Tangible Equity (annualized) -7.40% -76.72% Net Interest Margin 3.44% 3.03% Net Interest Spread 3.29% 2.81% Non-interest Income as a % of Revenue 23.83% 17.36% Non-interest Income as a % of Average Assets 0.99% 0.59% Non-interest Expense to Average Assets 2.88% 8.33% Efficiency Ratio 69.03% 245.79% Asset Quality: Nonperforming Loans $ 55,477 $ 17,851 Nonperforming Assets $ 74,258 $ 35,732 Nonperforming Loans to Total Loans 4.63% 1.43% Nonperforming Assets to Total Assets 4.47% 2.07% Allowance for Loan Losses to Period-end Loans 2.47% 1.55% Allowance for Loan Losses to Nonperforming Loans (X) 0.53 X 1.09 X Net Charge- offs to Average Loans (annualized) 2.58% 1.47% Capital Ratios: Equity to Total Assets 7.05% 7.74% Tangible Common Equity to Total Tangible Assets(1) 4.52% 5.32% Average Balances: Year to Date Interest Earning Assets Total Assets Total Loans Equity Interest Bearing Liabil- ities Quarterly Interest Earning Assets Total Assets Total Loans Equity Interest Bearing Liabil- ities Weighted Average Number of Shares Outstanding Basic 16,810,357 16,785,730 Diluted 16,810,357 16,785,730 Period end outstanding shares 16,812,625 16,793,175 (1) - Tangible Common Equity to Total Tangible Assets is period-ending common equity less intangibles, divided by period-ending assets less intangibles. Management provides the above non-GAAP measure, footnote (1) to provide readers with the impact of purchase accounting on this key financial ratio.
For additional information: F. Scott Bauer Chairman/CEO James Hastings Executive Vice President/CFO (336) 768-8500
1 Year Capital Bank Financial Corp. - Southern Community Capital Trust II - % Cumulative Trust Preferred Securities (MM) Chart |
1 Month Capital Bank Financial Corp. - Southern Community Capital Trust II - % Cumulative Trust Preferred Securities (MM) Chart |
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